Gulf Resources Inc (GURE) 2024 Q3 法說會逐字稿

Greetings, and welcome to the Gulf Resources Third Quarter 2024 Earnings Conference Call. (Operator Instructions) Please note this conference is being recorded. I will now turn the conference over to your host, Helen Xu. You may begin.

大家好，歡迎參加海灣資源 2024 年第三季財報電話會議。（操作員指示）請注意，本次會議正在錄音。現在我將會議交給主持人 Helen Xu。你可以開始了。

Thank you, operator. Good morning, ladies and gentlemen, and good evening to those of you for joining us from China. And we'd like to welcome all of you to Gulf Resources' third-quarter 2024 conference call. I'm Helen Xu, the IR Director. Our CEO of the company, Mr. Xiaobin Liu, is also joining this call today.

謝謝您，接線生。女士們、先生們，早安！我們歡迎大家參加海灣資源公司 2024 年第三季電話會議。我是投資者關係總監 Helen Xu。我們公司的執行長劉曉斌先生今天也參加了本次電話會議。

I'd like to remind you to all our listeners that in this call, certain management statements during the call will contain forward-looking statement information about Gulf Resources Incorporation and its subsidiary business and the products within the meaning of Rule 175 on the Securities Act of 1933 and the Rule 3b-6 under the Securities Exchange Act of 1934 and are subject to the Safe Harbor created by those rules.

我想提醒所有聽眾，在本次電話會議中，管理層的某些聲明將包含有關海灣資源公司及其子公司和產品的前瞻性聲明信息，這些信息符合《1933 年證券法》第 175 條和《1934 年證券交易法》第 3b-6 條的規定，並受這些規則所設立的安全港條款的約束。

Actual results may differ from those discussed today, taking into account a number of risk factors including, but not limited to, the general economic and business conditions in the PRC, the risks associated with the pandemic outbreak or future product development and production capabilities, shipments to end customers, market acceptance of new and existing products, additional competition from existing and new competition from the bromine and the other oilfields and power production chemicals; changing technology, the ability to make future bromine assets and the various other factors beyond its control.

實際結果可能與今天討論的結果不同，考慮到許多風險因素，包括但不限於中國的總體經濟和商業狀況、與大流行爆發或未來產品開發和生產能力相關的風險、向最終客戶的發貨、新產品和現有產品的市場接受度、來自溴和其他油田和發電化學品的現有競爭和新競爭的額外競爭；不斷變化的技術、生產未來溴資產的能力以及其他各種超出其控制範圍的因素。

All forward-looking statements are expressly qualified in their entirety by this cautionary statement and the Risk Factors detailed with the company's reports filed with the SEC. Gulf Resources assumes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call.

所有前瞻性陳述均完全符合本警告聲明和公司向美國證券交易委員會提交的報告中詳細說明的風險因素的明確限制。海灣資源不承擔修改或更新任何前瞻性陳述以反映本次電話會議召開日後事件或情況的義務。

Accordingly, our company believes expectations reflecting in those forward-looking statements are reasonable, and there can be no assurance of such will prove to be correct. In addition, any reference to the company's future performance represents the management's estimates as of today, November 20, 2024.

因此，本公司認為這些前瞻性聲明中所反映的預期是合理的，但不能保證這些預期將被證明是正確的。此外，對公司未來業績的任何提及均代表管理層截至今天（2024 年 11 月 20 日）的估計。

For those of you unable to listen to this entire call at this time, a replay will be available at the company's website. The call is also accessible through the webcast, and the link is accessible through our website. So please locate our press release issued earlier for the details.

對於那些現在無法收聽整個電話會議的用戶，公司網站上將提供重播。該電話會議也可透過網路廣播收聽，連結可透過我們的網站存取。有關詳細信息，請參閱我們先前發布的新聞稿。

I'd like to start out the call by saying that the company regrets that the change in auditors made it difficult to file out our 2023 10-K and 2024 10-Q in a timely manner. We also regret that we have not had a conference call since the end of the third quarter of last year. We recognize that we have to be active in communicating with investors and hope today will be the start of a new discussion between the company and its investors.

首先我想說，公司對審計師的變更導致我們難以及時提交 2023 年 10-K 和 2024 年 10-Q 報表感到遺憾。我們還很遺憾，自去年第三季末以來，我們還沒有舉行過電話會議。我們認識到我們必須積極與投資者溝通，並希望今天將成為公司與投資者之間新一輪討論的開始。

In this case, we will focus on the third quarter of 2024, but we are also willing to take questions about the first and second quarters as well as the fourth quarter of last year. I'd like to briefly cover the financial results. Then I will summarize a few issues of importance before turning the call over to Mr. Liu. And then we are opening -- we will be opening for the Q&A section.

在這種情況下，我們將重點關注 2024 年第三季度，但我們也願意回答有關去年第一季、第二季度以及第四季度的問題。我想簡單介紹一下財務結果。然後，我將總結幾個重要問題，然後將電話轉給劉先生。然後我們將開始問答環節。

So since the company filed its 10-Q yesterday for the third quarter 2024, all our financials are in the 10-Q filed. So for the three months ended September 30, 2024, the revenues for the third quarter were approximately $2.2 million, a decline of 21.8% compared to the same period of last year.

因此，由於公司昨天提交了 2024 年第三季的 10-Q 報表，因此我們所有的財務數據都在 10-Q 文件中。因此，截至 2024 年 9 月 30 日的三個月，第三季的營收約為 220 萬美元，與去年同期相比下降了 21.8%。

The net loss was approximately $3.5 million and the basic and diluted loss was $0.33 per share. During third quarter, the bromine revenues declined by 68% to approximately $1.6 million and crude salt revenue declined by 26% to $654,000. Bromine operation loss was approximately $4.0 million, while crude salt operation loss was $102,000.

淨虧損約 350 萬美元，基本虧損和稀釋虧損為每股 0.33 美元。第三季度，溴收入下降 68% 至約 160 萬美元，原鹽收入下降 26% 至 65.4 萬美元。溴業務損失約 400 萬美元，原鹽業務損失為 10.2 萬美元。

The losses from operations from our currently inactive chemical and natural gas business were approximately $339,000 and $39,000, respectively. For the nine months ended September 30, 2024, the revenues were approximately $5.9 million, a decline of 74.4% compared to the same period of 2023.

我們目前不活躍的化學和天然氣業務的營運損失分別約為 339,000 美元和 39,000 美元。截至 2024 年 9 月 30 日的九個月，營收約為 590 萬美元，與 2023 年同期相比下降 74.4%。

The losses from operations by segment were as follows: bromine was approximately $13.5 million, crude salt was approximately $47,000, chemicals was $990,000, and natural gas was $140,000. The net loss was approximately $40.6 million and the basic and diluted loss per share was $3.78. We incurred a loss of approximately $29.2 million from the disposition of equipment and purchased approximately $60.5 million worth of new equipment.

各部門的營運損失如下：溴約 1,350 萬美元，原鹽約 4.7 萬美元，化學品 99 萬美元，天然氣 14 萬美元。淨虧損約4,060萬美元，每股基本虧損及稀釋虧損為3.78美元。我們在設備處置方面蒙受了約 2,920 萬美元的損失，並購買了價值約 6,050 萬美元的新設備。

Our cash position declined to approximately $11 million from $72.2 million as of December 31, 2023. The total assets at the end of third quarter was approximately $193.9 million.

截至 2023 年 12 月 31 日，我們的現金狀況從 7,220 萬美元下降至約 1,100 萬美元。第三季末的總資產約為1.939億美元。

There are five major issues we'd like to highlight during this call: the economics of the bromine business, the purchase of lead for crude salt and bromine and our chemical businesses, our natural gas business, and the last is the cost of our flood prevention project.

在這次電話會議中，我們想強調五個主要問題：溴業務的經濟性、用於原鹽和溴的鉛購買以及我們的化學業務、我們的天然氣業務，最後是我們的防洪項目的成本。

Firstly, let's look at our bromine segment. To better understand the economics of our bromine segment, I'm going to focus on the results of the third quarter from year 2022, 2023, and 2024. So during the year 2022, the company earned approximately $10.6 million in bromine. But in year 2024, we lost $4 million.

首先，讓我們來看看我們的溴部分。為了更了解我們溴部門的經濟狀況，我將重點放在 2022 年、2023 年和 2024 年第三季的業績。因此，在 2022 年，該公司的溴收入約為 1,060 萬美元。但在 2024 年，我們損失了 400 萬美元。

During this period, revenue declined by 92%. Much of the decline was due to the price of bromine, which dropped 68%, but some was also due to the lower level of [salt] produced, which declined 75%. During this period, our utilization dropped from 34% to 8%. One impact of the lower level of production and the decline in utilization was that the cost per ton more than doubled from $2,773 to $5,709 because overhead, depreciation, amortization, and other costs had to be allocated over a much lower level of production. Like oil, good or any other element, our company has a relatively fixed amount of bromine available for mining in our properties.

在此期間，收入下降了92%。大部分下降是由於溴的價格下降了 68%，但也有一部分原因是產量較低（下降了 75%）。在此期間，我們的利用率從34%下降到8%。產量較低和利用率下降的一個影響是，每噸成本增加了一倍多，從 2,773 美元增加到 5,709 美元，因為必須將間接費用、折舊、攤提和其他成本分配到更低的生產水準。與石油、商品或任何其他元素一樣，我們公司擁有相對固定數量的溴可供開採。

When the pandemic hit, demand for bromine, especially for antiseptics surged and the price of bromine declined, management decided to limit the sales and protect our mineral assets for the time when prices rebound. When we made this decision, management recognized that the lower level of production would impact our profits.

當疫情爆發時，對溴的需求，尤其是防腐劑的需求激增，溴的價格下降，管理層決定限制銷售並保護我們的礦產資產，以備價格反彈。當我們做出這個決定時，管理層意識到較低的生產水準會影響我們的利潤。

However, we believe it will have been a disservice to shareholders to sell more of our bromine at extremely low prices. Since the end of third quarter, bromine prices have increased about substantially. We believe we are approaching the time when we will choose to increase production and utilization.

然而，我們認為以極低的價格出售更多溴對股東來說是一種傷害。自第三季末以來，溴素價格大幅上漲。我們相信，我們選擇增加產量和利用率的時刻即將到來。

Second issue was about the purchase of land for the crude salt field and bromine. In June, the company had an opportunity to secure additional land for crude salt field and bromine from groups in our production area nearby. At the time, we were aware of the existing price of bromine and the impact of that price on the likely earnings we would have in this quarter.

第二個問題是關於購買原鹽田土地和溴的問題。6 月份，公司有機會從附近生產區的團體獲得額外的原鹽田和溴用土地。當時，我們知道溴的現有價格以及該價格對我們本季可能獲利的影響。

Nevertheless, we believe this was an exceptional opportunity for us to gain control of more land for production of crude salt and bromine in the future. Our management team conducted an analysis of this opportunity and concluded that acquiring its crude salt fields would enable the company to produce most crude salt and bromine and that the cash we invested was likely to be returned in the next four to five years.

儘管如此，我們相信，這對我們來說是一個絕佳的機會，讓我們在未來控制更多的土地用於生產原鹽和溴。我們的管理團隊對這一機會進行了分析並得出結論，收購其原鹽田將使公司能夠生產大部分原鹽和溴，我們投資的現金很可能在未來四到五年內收回。

We also want our shareholders to know that we are still in negotiations with sellers over the timing and the terms of the stock portion of the agreement. The company wants investors to understand that we would not have made this decision in June if we were not convinced this was an excellent short-term investment that would not jeopardize any of our other opportunities.

我們也想讓我們的股東知道，我們仍在與賣方就協議的時間和股票部分的條款進行談判。公司希望投資者明白，如果我們不相信這是一項極好的短期投資，並且不會危及我們的任何其他機會，我們就不會在六月做出這個決定。

Third issue is about our chemical factory. While the company made the decision to spend money on the crude salt field, we also decided to postpone spending money on completing our chemical factory. We have invested about $45 million out of a projected $69 million in building this new chemical factory.

第三個問題是關於我們的化工廠。當公司決定投資原鹽田時，我們也決定延後投資建造化工廠。這座新化工廠的建設預計投資 6,900 萬美元，我們已投資約 4,500 萬美元。

However, as we started in the industry, we concluded that the most companies in our niches, currently, some of them are losing money. Further, we continue to see interesting new opportunities in areas like zinc-bromine and sodium-ion batteries. If we were to pursue one of these opportunities, we would modify the configuration of our factory.

然而，當我們進入這個行業時，我們就得出結論，我們所處的市場中的大多數公司，目前，其中一些公司正在虧損。此外，我們繼續在鋅溴和鈉離子電池等領域看到有趣的新機會。如果我們要追求其中一個機會，我們就會修改工廠的配置。

Rather than commit capital to a business that will not produce short or intermediate-term returns, we decided to wait until we have better visibility as to the best opportunities. We are still committed to our chemical business.

我們決定等到對最佳機會有更清晰的認識後再將資金投入到無法產生短期或中期回報的業務中。我們仍然致力於我們的化學品業務。

We are looking at many different alternatives, including potential joint ventures and we'll move ahead with chemicals as the market improves. The third is about our natural gas project. The company has also refrained from investing money -- more money in all this natural gas segment.

我們正在尋找許多不同的替代方案，包括潛在的合資企業，並且隨著市場的好轉，我們將推動化學品業務的發展。第三個是我們的天然氣計畫。該公司也避免向整個天然氣領域投入更多資金。

We have been working with local authorities and they are finalizing the Provincial Environmental Plan. During this period, we have become convinced that we may maximize our returns by strategy such as in natural gas and bromine in Sichuan Province by finding the right joint venture partner.

我們一直在與當地政府合作，他們正在最終確定省級環境計劃。在此期間，我們堅信，透過尋找合適的合資夥伴，我們可以在四川省的天然氣和溴領域實現戰略回報最大化。

The last issue is about flood prevention. In flood prevention project, in year 2023, the company spent slightly more than $50 million on flood prevention because the work was conducted in neighboring rivers that were not part of our property. These investments were expensed instead of capitalized. These expenditures impacted both our earnings and balance sheet. However, we believe they will benefit us in the future.

最後一個問題是關於防洪。在防洪計畫中，2023 年，公司在防洪方面花費了略高於 5,000 萬美元，因為這項工作是在不屬於我們財產的鄰近河流中進行的。這些投資被計入費用而非資本化。這些支出影響了我們的收益和資產負債表。然而，我們相信它們將來會為我們帶來利益。

In the past six years, the company spent about $47 million in flood repair after the two typhoons. As we have previously reported, not only did the flood damaged our facilities, they also impacted our ability to produce from some of our wells. With this flood prevention project completed, we believe this may help the company to obtain approval to open our bromine factories number two and number 10. So now let me turn the call over to Mr. Liu for some comments.

過去六年中，該公司在兩次颱風後花費了約4700萬美元用於水災修復。正如我們之前所報導的，洪水不僅損壞了我們的設施，也影響了我們一些油井的生產能力。隨著此防洪計畫的完成，我們相信這可能有助於該公司獲得開設第二號和第十號溴工廠的批准。現在，讓我將電話轉給劉先生，請他發表一些評論。

(Spoken in foreign language) So as Mr. Liu stated that at the beginning of this call, we are very pleased to have our filings, which is up to date and look forward to renewed communication with our investors. The economy of China has been difficult, but we see signs that it is beginning to recover. When we saw the weakness, we postponed the final delivery of equipment for our chemical business because we did not see a short-term path to profitability. We are continuing to explore opportunities for zinc and bromine and sodium-ion batteries that could potentially offer much more attractive returns and are considering potential partners in this field.

（外語）正如劉先生在本次電話會議開始時所說，我們很高興收到最新的文件，並期待與我們的投資者重新溝通。中國經濟一直很困難，但是我們看到經濟開始復甦的跡象。當我們發現弱點時，我們推遲了化學業務設備的最終交付，因為我們看不到短期內獲利的途徑。我們正在繼續探索可能提供更具吸引力的回報的鋅、溴和鈉離子電池的機會，並正在考慮該領域的潛在合作夥伴。

We also stopped spending money on natural gas while we considered various joint venture opportunities and strategies. We made our investment in acquiring land for crude salt because we believed this investment would produce more strong returns in coming years. We want our investors to understand that the company are making decisions that are in the best interest for its shareholders.

我們也停止在天然氣方面的投入，同時考慮各種合資機會和策略。我們投資收購原鹽土地是因為我們相信這項投資將在未來幾年產生更豐厚的回報。我們希望我們的投資者明白，公司正在做出符合股東最佳利益的決策。

The company also believes that our [flood] prevention project will enable it to produce more bromine and crude salt and allow the company to open its (inaudible) closed factories. The company is now well positioned to capitalize if the Chinese economy improves, as the company believes it will since the end of the last quarter, bromine prices have increased substantially.

該公司還認為，我們的防洪工程將使其能夠生產更多的溴和原鹽，並允許該公司重新開放（聽不清楚）已關閉的工廠。如果中國經濟好轉，該公司現在就處於有利地位，可以利用這一機遇，因為該公司相信，自上個季度末以來，溴的價格已經大幅上漲。

We believe that this trend will continue, and we appreciate the patience of our shareholders and look forward to more active communication in the future. So Tom, operator, can we open for the Q&A section?

我們相信這一趨勢將會持續下去，我們感謝股東的耐心，並期待未來有更積極的溝通。那麼接線生湯姆，我們可以開始問答環節嗎？

(Operator Instructions) [Qui Min Jin].

（操作員指令）[Qui Min Jin]。

I have been an investor for more than 10 years. And then I still remember a few years ago that when you did the quarterly report, seeing nice things and seeing confidence, [staying] with us. And then in the report, you just stated that you spend millions of dollars in the new field, while your revenue and the profit is substantially going downhill.

我當投資者已經十多年了。我還記得幾年前你們做季度報告的時候，看到美好的事物，看到信心，就和我們在一起。然後在報告中，你剛才說你在新領域投入了數百萬美元，而你的收入和利潤卻大幅下降。

And then I would like to say -- I'd like to hear that how you -- what is your reasoning and your color on investing millions of dollars while the revenue and profit is substantially going down here? And you said that, that investment is going to be returned back to profit or whatever what you hope within four or five years.

然後我想說——我想聽聽你——在收入和利潤大幅下降的情況下，你投資數百萬美元的理由和態度是什麼？您說過，這項投資將在四、五年內實現利潤回報，或無論您希望實現什麼回報。

I'd like you to kind of share some light on that. What is the reasoning behind that so that we would have a better understanding? Instead of keep saying that we're very hopeful, please stay with us and like what you said a few years ago, but nothing has changed. That's my question.

我希望您能就此問題發表一些看法。這背後的原因是什麼，以便我們能更好地理解？不要一直說我們非常有希望，請和我們在一起，就像你幾年前說的那樣，但什麼都沒有改變。這就是我的問題。

Can you just be more specific about your question based on my understanding that you are talking about the crude salt acquisition. Am I right? You want to get a more clear explanation why the company expects it will have a good return in coming four to five years? This is your question?

據我了解，您正在談論原鹽收購，您能否更具體地說明您的問題。我說得對嗎？您想獲得更清晰的解釋，為什麼公司預計未來四到五年將獲得良好回報？這是你的問題嗎？

Yes. You keep investing, including whatever typhoon reinforcing facility, you spend millions of dollars. You said that it's a better prevention. I mean, while the revenue is going downhill, meaning as a businessman, I would not do anything until I see the uptrend in the market and the demand is going up. That's one I'm going to invest.

是的。你們不斷投資，包括任何防颱風加固設施，都花了數百萬美元。你說這是一種更好的預防措施。我的意思是，當收入下降時，作為一名商人，我不會做任何事情，直到我看到市場出現上升趨勢並且需求上升。我要投資這個。

But you do that while the revenue is still down, there's no hope of the revenue going up. And then you said that we do everything we can to -- for the benefit of the investors. I was in China in July of 2024 this year. During business hour, I keep calling the number on record about 20 times, no one answered the phone. Is this the sign that you do everything for the benefit of the investors?

但如果你在收入仍然較低的情況下這樣做，那麼收入上升就沒有希望了。然後您說我們竭盡所能——為了投資者的利益。我今年2024年7月在中國。在上班時間，我連續撥打該記錄號碼約20次，均無人接聽。這是不是表明你們所做的一切都是為了投資者的利益？

There is not even a person to answer the phone. I thought the business is bad. There is no way for me to sell my share because I have a substantial loss on my investment. So I'm very upset about this thing. I keep calling the number on record.

甚至沒有人接電話。我覺得生意不好。我沒有辦法出售我的股份，因為我的投資損失慘重。所以我對這個事情很不高興。我一直在撥打記錄上的電話號碼。

No one on the phone. Can you answer this question as well? Thank you.

電話那頭沒人。您也可以回答這個問題嗎？謝謝。

(Spoken in foreign language) So firstly, about your question about the phone numbers of the company. Because it's a fixed number and in the office, sometimes because people now in China, they normally use mobile phones. And we cannot make sure every time there is people sitting there. But if you want to visit the company, you can make appointment or e-mail me first, then we can visit. And I think there's an investor who have been in the factory -- company sites twice, visited successfully. There is no doubt on it.

（外語）首先，關於您提到的公司電話號碼的問題。因為它是一個固定號碼，而且在辦公室，有時因為現在在中國的人們通常會使用手機。而我們無法確保每次都有人坐在那裡。但如果您想參觀公司，您可以先預約或給我發電子郵件，然後我們才能參觀。我認為有一位投資者已經兩次參觀過工廠和公司現場，並且取得了成功。對此毫無疑問。

And then about your question, firstly, let's look at the flood protection project. Mr. Liu has two points. Firstly, we do this; it's required by the government because based on the government policy, there is a mineral restoration policy, which means that the company's mining industry, due to its mining impacted on the environment and the company site and the surrounding area. So the company has to do this -- to do the flood protection project to following the government requirement.

然後關於你的問題，首先我們來看看防洪工程。劉先生有兩點看法。首先，我們這樣做；這是政府的要求，因為根據政府的政策，有一項礦產恢復政策，這意味著該公司的採礦業由於其採礦對環境和公司所在地及週邊地區產生了影響。所以公司必須這麼做──按照政府的要求進行防洪工程。

Secondly, because this project can help the company to avoid future potential flood damage. This is about the flood protection project. Secondly, about the crude salt acquisition project. Because for the long-term environmental issue, the government requires the consolidation -- consolidated production of bromine and crude salt. So for company, currently, we do not have sufficient place for the wasted halogen water to flow to our crude salt aqua duct. So in order to do the consolidated production, we must have enough crude salt fields for this consolidated production and for the long-term growth of the company.

其次，因為該專案可以幫助公司避免未來潛在的洪水災害。這是關於防洪工程的。第二，關於原鹽收購項目。因為為了長期的環境問題，政府要求整合──整合溴和原鹽的生產。所以對公司來說，目前我們沒有足夠的地方讓廢棄的滷水流入我們的原鹽水管。所以為了實現綜合生產，我們必須擁有足夠的原鹽田，才能實現綜合生產，也是為了公司的長期發展。

This is about the crude salt project. So for short term now, we see the company temporarily at a loss because the low price of bromine as a market, the company intentionally controlled the production and the selling volume of bromine, so which temporarily caused the company loss at this moment. But we think following the Chinese economy recovery and the price of bromine will be increased then the company will start to increase its production as well. Accordingly, the profit will also increase.

這是關於原鹽項目的。所以就目前短期來看，我們認為公司暫時處於虧損狀態，因為目前溴市場價格低迷，公司有意控制溴的生產和銷售量，所以導致公司目前暫時處於虧損狀態。但我們認為，隨著中國經濟復甦以及溴價格上漲，該公司也將開始增加產量。相應地，利潤也會增加。

(Operator Instructions). [John Rawls].

（操作員指令）。 [約翰·羅爾斯]

Yes. I have two questions. The first is when do you expect to make decisions about the future of the chemical factory and about the natural gas project? Natural gas was announced 12 years ago. And virtually every interaction since then has been that we are contemplating having a partner doing it this way, doing it that way.

是的。我有兩個問題。第一個問題，您預計什麼時候會對化工廠的未來和天然氣項目做出決策？天然氣是12年前就宣布的。從那時起，幾乎在每一次互動中，我們都在考慮讓伴侶這樣做、那樣做。

I wonder when a decision is actually going to be made. Can you respond to that question?

我不知道什麼時候才能真正做出決定。你能回答這個問題嗎？

(Spoken in foreign language) Hi, John. So here's the response from Mr. Liu. First, look at the chemical segment, when it will be making the decision. It totally depends on the market because the company management think that when we do a big investment, we have to see the future of these products or this segment.

（外語）嗨，約翰。以下是劉先生的回應。首先，看看化學部門何時會做出決定。這完全取決於市場，因為公司管理層認為，當我們進行大投資時，我們必須看到這些產品或這個細分市場的未來。

So some years ago, when the company started this chemical segment, it was a relocation project. That time, we can see in the market, this project with really good profit and good future for antibiotics with raw materials to be used for human and animals. But the plan was temporarily stopped because the market for these products and the future is becoming dramatically decreased. And if the company starts to continue with this project, it may face loss even. So now, the company is looking for some other products or some other industries this can be transferred to.

幾年前，當公司啟動這個化學部門時，這是一個搬遷計畫。當時我們在市場上看到，這個計畫對人和動物來說，原料抗生素的利潤確實很好，前景也很好。但由於這些產品和未來的市場正在急劇萎縮，該計劃被暫時停止。如果公司繼續進行這個項目，甚至可能面臨虧損。所以現在，該公司正在尋找一些其他產品或其他可以轉移的行業。

So totally depends on the next appropriate product, which can meet the market demand and with good future. This is the first one. Second one, about the natural gas project. The major problem is that the company now wanted to get cooperation with state-owned operation and in order to better get the government approval on this natural gas mining and trading.

所以完全取決於下一個合適的產品，它可以滿足市場需求並擁有良好的前景。這是第一個。第二個問題，關於天然氣計畫。現在最大的問題是，該公司希望與國有企業合作，以便更好地獲得政府對天然氣開採和貿易的批准。

But the state-owned factories, with very low efficiency, even our management team always frequently, they had to fly to Sichuan to be in discussion with the state-owned teams, but we cannot confirm when this will happen.

但是國營工廠效率很低，甚至我們的管理團隊也經常要飛到四川和國營團隊進行商談，但是我們無法確認什麼時候會發生這種情況。

This is our current situation.

這就是我們的現狀。

Okay. My second question has to do with the bromine operation. It's still quite profitable, high gross margin even at today's prices. So I don't understand your reasoning about limiting production. I understand that you might get more for the sales when the price of bromine goes up.

好的。我的第二個問題與溴作業有關。即使以今天的價格計算，它的利潤仍然很高，毛利率也很高。所以我不明白你限制生產的理由。我知道當溴的價格上漲時你的銷售額可能會更高。

But today, you're getting significant losses from this restriction of production. And the cash that the company now has is much less than it was in the past. It seems to me you're flirting with bankruptcy by taking this approach. Let me just finish. All the cash has been invested in things which, to this point, do not seem to impact your revenue.

但今天，由於這種生產限制，你們遭受了重大損失。而公司現在擁有的現金比過去少了很多。在我看來，你採取這種做法就是走向破產。讓我把話說完。所有現金都已投資於到目前為止似乎不會影響您的收入的事情。

So restricting your revenue seems to me a policy that's going to hurt the company in the long run.

因此，在我看來，限制收入是一項長期會損害公司利益的政策。

Okay. About your first part of this question, I think we explained earlier because the company thinks our bromine resources are limited such as oil and gold. So in order to get a better maximized profit, the company intentionally controlled its production at this very low market selling price. But when the Chinese economy starts recovering, when bromine prices increase, our production will also increase as well. This will increase the company's revenue in the future as well when Chinese economy comes back, recovery.

好的。關於你提出的問題的第一部分，我想我們之前已經解釋過了，因為公司認為我們的溴資源是有限的，就像石油和黃金一樣。所以為了獲得更好的最大化利潤，公司有意將生產控制在非常低的市場銷售價格。但當中國經濟開始復甦時，當溴價上漲時，我們的產量也會增加。當中國經濟恢復復甦時，這也將增加公司未來的收入。

About your second question, maybe I can translate to Mr. Liu and see what's his comments on it.

關於你的第二個問題，也許我可以翻譯給劉先生，看看他對此有何評論。

(Spoken in foreign language) Okay. So John, here's Mr. Liu's comment that (inaudible) this is nonsense -- it does not have any relation to bankrupt because all these actions, all the money, cash we spend are for the long-term growth purpose of the company. So firstly, if we look at the flood protection project, we have to follow China rules because based on China rules, the mining industry have to do this for the mineral restoration. These were the company's liabilities.

（外語） 好的。約翰，這是劉先生的評論，（聽不清楚）這是無稽之談——這與破產沒有任何關係，因為我們採取的所有這些行動，花費的所有金錢、現金都是為了公司的長期增長目的。因此首先，如果我們看防洪項目，我們必須遵守中國的規則，因為根據中國的規則，採礦業必須這樣做才能進行礦產恢復。這些都是公司的負債。

For so many years, the company is upgrading bromine resources, but never do this. So now, the company is doing this since the government is requiring it to do. So this is a necessary, must-do action. It should help the company build a strong and a necessary fundamental position, foundation for future growth. Secondly, the crude salt assets acquisition, which should secure the company's future, can produce more bromine with more crude salt field. So all these two actions have secured the company to be legally long-term production and growth.

這麼多年，公司都在進行溴資源升級，但從來沒有做過這件事。所以現在，該公司這樣做是因為政府要求它這麼做。所以這是一個必要的、必須要做的行動。它應該有助於公司建立強大且必要的基礎地位，為未來的成長奠定基礎。其次，原鹽資產收購可以透過增加原鹽田來生產更多的溴，對公司的未來發展具有保障。上述兩項舉措，確保了公司能夠合法、長期地生產發展。

All this cash are spent on this purpose.

所有這些現金都用於此目的。

[David Chu].

[朱大衛]。

I want to ask, you have spent so much money in improving the foundation or infrastructure of the field, but you have no guarantee to generate increased revenue or sales. And of course, you cannot control the price as well. So does the management or the Board has any evaluation or done any research on how to secure increased revenue? That's the question.

我想問，你們花了那麼多錢去改善場館的基礎或基礎設施，卻沒有保證能夠增加收入或銷售。當然，你也無法控制價格。那麼管理階層或董事會是否對如何確保增加收入進行過任何評估或研究？這就是問題所在。

Okay. Hi David, because there are two major segments, the first one is about the flood control project. This one was based on the government requirements. We had to do this. Then the second one is the crude salt field acquisition.

好的。你好，大衛，因為有兩個主要部分，第一個是關於防洪工程。這是根據政府的要求。我們必須這麼做。第二個是原鹽田的收購。

So I mean, if you'd like a real analysis, you mean the second one or the first one?

所以我的意思是，如果您想要進行真正的分析，您指的是第二個還是第一個？

Management or the Board did any research on the future demand of the product and how are they going to increase it in order to generate more revenue? Because you spend so much money on the project. And if you do not have any plan to generate increased sales and revenue, then those money are powering into a hole.

管理階層或董事會是否對產品的未來需求做過任何研究，以及如何增加產品需求以創造更多收入？因為你在這個專案上花了太多錢。如果你沒有任何計畫來增加銷售額和收入，那麼這些錢就會打水漂。

(Spoken in foreign language) Yes, we did the analysis based on the market and based on the acquisition we did like how many -- after our acquisition, this -- the company, how many tons we produce and how it will influence the company's production capability. And even based on current low market situation, we did all the analysis on a very conservative perspective and with profit like we estimated like we before said, which we estimate will get retained in future four to five years on a conservative point of view.

（外語）是的，我們根據市場和收購情況進行了分析，例如收購後這家公司能生產多少噸，以及這將如何影響公司的生產能力。即使基於當前低迷的市場形勢，我們也是以非常保守的角度進行的所有分析，並且像我們之前所說的那樣估計利潤，從保守的角度來看，我們估計未來四到五年內利潤將得以保留。

What is the management's estimation of this current quarter's sales volume?

管理階層對本季的銷售量有何估計？

Current quarter? You mean fourth quarter?

本季？你是指第四季嗎？

Yes. Current quarter, the fourth quarter. Does the management comes up with any estimated sales?

是的。本季度，第四季。管理階層有沒有給出預期的銷售額？

The volume, do you mean?

你是指音量嗎？

Volume on revenue.

收入量。

(Spoken in foreign language) Yes, we will have announcement later on for the transparency and fairness to all shareholders.

（外語）是的，我們稍後會發佈公告，以確保對所有股東的透明度和公平性。

(Operator Instructions) David Chu.

(操作員指令) David Chu。

So the management cannot provide the current quarter estimation. Does it mean that the management also do not have a full picture on 2025 sales figure and volume?

因此管理層無法提供本季的估計。這是否意味著管理階層對 2025 年的銷售數字和銷售還沒有完整的了解？

No. Hi David, because for the transparency and fairness to all our shareholders, this number, we can provide for guidance but cannot only disclose in this conference call.

不。你好，大衛，為了對所有股東保持透明和公平，我們可以提供這個數字作為指導，但不能僅在本次電話會議中披露。

Why not?

為什麼不呢？

Yes, we will make an announcement later on in our press release for the guidance.

是的，我們稍後會在新聞稿中發布指導訊息。

Okay. Another question. Is it possible for the shareholders to visit the factory or the plant?

好的。另一個問題。股東可以參觀工廠或廠房嗎？

Yes, of course.

是的當然。

So the company can arrange to have the shareholders go to the factories and visit the factories directly?

那麼公司可以安排股東們去工廠，直接參觀工廠嗎？

Yes, we have shareholders visited the company actually already.

是的，實際上已經有股東來參觀公司了。

When is that?

那是什麼時候？

I think twice, I cannot remember the clearly months. But this shareholder, as my memory, at least twice.

我想了想，我記不清是哪個月份了。但這個股東，正如我的記憶，至少有兩次。

But you have no idea when?

但您不知道什麼時候？

Let me check. Most recently was -- I think end of last year or beginning of this year is the most recent one.

讓我檢查一下。最近一次是——我認為是去年年底或今年年初。

Okay. What is the best time to visit the factory?

好的。參觀工廠的最佳時間是什麼時候？

(Spoken in foreign language)

（用外語說）

What's the reply? What's the best time to visit?

回復是什麼？什麼時候是最佳遊覽時間？

Yes, yes. I'm waiting for Mr. Liu to respond.

是的，是的。我在等劉先生的回覆。

(Spoken in foreign language) Normally, just notify the company or e-mail me in advance. You can visit the company site or (inaudible).

（外語）通常情況下，只需提前通知公司或給我發電子郵件即可。您可以造訪公司網站或（聽不清楚）。

Okay, thank you. Another question concerning the shareholdings. I want to know what is the percentage the management or the Board of Directors own the company's shares?

好的，謝謝。另一個問題涉及股權。我想知道管理階層或董事會擁有公司股份的百分比是多少？

I think you can reference to the company's most recent Annual General Holders' Meeting proxy being filed on SEC website. And I can give you the link if you e-mail me.

我認為您可以參考該公司在美國證券交易委員會網站上提交的最新年度股東大會代理文件。如果您給我發送電子郵件，我可以向您提供連結。

You mean under the SEC filing?

你是指根據美國證券交易委員會 (SEC) 的文件嗎？

Yes.

是的。

And just a follow-up. It looks like that they do not have a majority ownership of the company based on the number of shares they have. Is that correct?

這只是後續行動。從他們持有的股份數量來看，他們似乎並不擁有該公司的多數股權。那正確嗎？

Yes. I cannot clearly remember it like you mean who?

是的。我記不太清楚，你是指誰？

Are there any other type of shares that the management owns that really control the company or they are just purely like the other shareholders, just own ordinary shares and control the company?

管理階層是否擁有其他類型的股份來真正控制公司，或者他們只是像其他股東一樣，只擁有普通股並控制公司？

I think you can reference the filings on the SEC website. If you need, I can e-mail you the link.

我認為您可以參考美國證券交易委員會 (SEC) 網站上的文件。如果您需要，我可以透過電子郵件向您發送連結。

I can't find it in the website. That's why I'm asking. It sounds pretty strange. It indicates that the management own a pretty small number of percentage of the shares, but they control the company, okay? So there must be some other ownership that the management or Board has that we do not know.

我在網站上找不到它。這就是我問的原因。這聽起來很奇怪。這顯示管理階層只擁有很少一部分股份，但他們卻控制著公司，好嗎？因此，管理階層或董事會一定還擁有一些我們不知道的其他所有權。

I don't get you because as I see here, Mr. Yang and his family owns around 18.5%. I don't know.

我不明白你的意思，因為據我所知，楊先生和他的家人擁有約 18.5% 的股份。我不知道。

So that's a small percentage. I know, that's a small percentage. And based on that percentage, they can easily be outvoted and kicked out of the management by the majority of other shareholders. So if they own just less than 20% of the company, but they control the company, that's really strange. That's why I'm curious.

所以這只是一個很小的百分比。我知道，這只是很小的百分比。而且根據該百分比，他們很容易被其他大多數股東否決並踢出管理層。因此，如果他們擁有該公司不到 20% 的股份，但卻控制著該公司，那就真的很奇怪了。這就是我好奇的原因。

Are there any other shares ownership that protect them or help them to control the company or other shareholders on the line can throw some light on this?

有沒有其他股權可以保護他們或幫助他們控制公司或其他股東，可以對此作出解釋嗎？

The company has Board of Directors, and we have Annual General Meeting as well.

公司有董事會，也有年度股東會。

Yes. I understand. So I would say the other 80% ownership shareholders didn't do anything to address the company issues. They just sit there and didn't do anything at all and that the minority shareholders do the things. That's a pretty strange issue.

是的。我明白。因此我想說其他 80% 所有權的股東沒有採取任何措施來解決公司問題。他們只是坐在那裡，什麼都不做，小股東們做的事情。這是一個相當奇怪的問題。

Any other shareholders on the line to comment on this?

有其他股東可以對此發表評論嗎？

Qui Min Jin.

金奎敏。

I consent with the gentleman's opinion on the majority of the owners. They're not in control of the company. From the website, they indicated as of December 2023, all the major control people like CEO, CFO, and the -- a few others, they own only approximately 58,000 shares, which is really a fraction of the company's entire holding. That's the minority. And also, I want to follow-up with my previous questions, which were not exactly translated correctly.

我同意這位先生對大多數業主的意見。他們無法控制該公司。從網站上看，他們表示，截至 2023 年 12 月，所有主要控制人，如執行長、財務長和其他一些人，他們只擁有約 58,000 股股份，這實際上只是公司全部持股的一小部分。那是少數。另外，我想跟進我之前提出的問題，這些問題翻譯得不太正確。

I was in China in July, and I called during business hours about 20x, no answer. And then Mr. Liu, the company's CEO said that you can schedule. I also, in the past year or two, sent e-mail to Helen twice with no answer. And with no answer from my e-mail request and with no answer to anybody's phone call from the company phone record, how can I, as an investor, to schedule something to visit or get any communication at all from the company?

我七月在中國，在工作時間打過大約 20 通電話，但無人接聽。然後公司劉總說你可以安排。在過去的一兩年裡，我也給海倫發過兩次電子郵件，但沒有回應。我的電子郵件請求沒有得到答复，公司電話記錄中也沒有任何人接聽我的電話，作為投資者，我如何安排訪問或與公司進行任何溝通？

That's my question.

這就是我的問題。

Qui Min, I don't know when did you send me e-mail because I just checked on my mailbox. I did not get any e-mail from you. But there are shareholders which have visited the company site. You can send me an e-mail in advance and arrange your trip to company.

Qui Min，我不知道你什麼時候給我發電子郵件，因為我剛剛查看了我的郵箱。我沒有收到您的任何電子郵件。但確實有股東到過公司現場。你可以提前給我郵件，安排你去公司的行程。

We have reached the end of the Q&A session at this time, and we do thank you for your participation. I'd now like to turn the floor back to Helen Xu for closing remarks.

此刻，問答環節已結束，非常感謝您的參與。現在我想請 Helen Xu 作最後發言。

Hi, operator. Since the time is up, I think we can close the call for today. Thank you.

你好，接線生。由於時間已經到了，我想我們可以結束今天的通話了。謝謝。

Thank you. This does conclude today's conference call. You may disconnect at this time, and have a wonderful day. Thank you for your participation.

謝謝。今天的電話會議到此結束。現在您可以斷開連接，並享受美好的一天。感謝您的參與。